Unions say they will use the government’s hastily convened Business Forum today to demand that the government expand its “co-investment” model that rescued Holden to other industries that are under pressure.

The government promised earlier this year it would give Holden $275 million in return for the manufacturer staying in Australia and investing another $1 billion.

Now other industries, such as tourism, are demanding the same treatment. But the use of the term “co-investment” by the government and the union movement to describe old fashioned subsidies should fool no one.

This government-style “investment” bears little resemblance to investment as it is commonly understood in the markets or by private investors. The money is not being paid to the industry groups, notably car manufacturers, in return for a share of the equity or for any rate of return, fixed or floating. There is no expectation that the money will be repaid, with or without interest. Nor is there a business case that determines whether allocating scarce taxpayer funds to propping up industries that should be gaining competitiveness under their own steam will provide the best economic return.

Union leaders talk of a “co-investment model”, as if it is a new, business-friendly means of attracting overseas investment that will encourage industry. This talk disguises the reality that such payments are government handouts or subsidies made in a desperate effort to keep manufacturing operations and jobs in Australia.

However, this so-called model only seems to apply to the politically sensitive manufacturing industry. If there is any payout it is political, allowing politicians to say they have saved manufacturing jobs, or as we saw in the case of Holden, car workers receive a hefty pay rise once the “co-investment” has been locked in.

Prime Minister Julia Gillard, Treasurer Wayne Swan, and all federal ministers should cease their Orwellian word-play and stop trying to disguise handouts as some sort of economically sensible investment.

Consumers were confused enough when the subsidies for manufacturing industries were largely hidden from view in the form of tariffs. Taxpayers should not be further confused by jargon that calls an industry hand out something else.